week3 - Risk-Returns 1 Risk-Returns Colin Callaway FIN/370...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Risk-Returns 1 Risk-Returns Colin Callaway FIN/370 04/04/2016 Cheryl Heath
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Risk-Returns 2 Introduction Investing is a staple of today's market economy and can yield great rewards for those brave enough to dive in. There are several different forms of investing including stocks, bonds, and venture capital. All investments require one to put in some form of monetary stake with the hope that the return will be greater then the initial stakes. In order to accomplish this, one must first be able to identify and evaluate the relationship between risk and return. After better understanding the relationship to between risk and reward it become easier to understand a better approach to investing if future business ventures. Risk-Returns In the world of finance, risk is identified as the potential for an investment to yield unexpected returns. Typically unexpected returns are negative, meaning they are lower then anticipated. All investments carry a certain amount of risk but some types of investments carry a higher risk then others. Investments that are low in risk are typically also likely to be low in return while those that are high in risk are likely to be high in return. Keeping in mind that low risk is safer but on average it brings in lower return, it is important to remember that even low risk includes risk. Bonds that used to be considered solid investments can be described as a unstable investment in certain situation. This relationship means that the key to investing is always evaluating opportunities to identify which of them offers the greatest return for the lowest risk. Sometimes finding this balance is hard since the very
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern